Every so often, I peruse through the announcements of attorney disbarments, suspensions and other disciplinary actions. In most cases, the disbarred attorneys have been practicing for a long time, are over 50 years old and have been involved in trust account or fiduciary breach violations.
But one particular disbarment caught my eye – details will be changed. The person who I will call “Sandra” is in her early 30’s and was admitted to the bar less than five years ago. She got her undergrad degree from an expensive private school and her law degree from a low ranked school in the late 2000’s.
Not too long after graduation, Sandra associated herself with non-lawyers in setting up a loan modification mill. For almost one year, Sandra worked at the loan mod mill as the “in-house counsel” using her name and law license to represent clients before banks in order to renegotiate their mortgages or to delay foreclosures.
The owners of this racket did some really scary shit. They set up deeds taking a 10% interest in the loan mod client’s property, And in some cases engaged in bankruptcy fraud including FILING BANKRUPTCY WITHOUT THE CLIENT’S PERMISSION!
Sandra knew about these fraudulent practices but did nothing about it nor did she quit. And how much was Sandra paid for participating in this scam? $3400 per fucking month. I am guessing that Sandra owed around $150,000 after graduation. Under the standard repayment plan, at least half of her monthly income will go towards paying her student loans.
As with a number of these loan mod scams, the clients got nothing out of this. In fact, some were in worse trouble than before and faced criminal exposure for engaging in bankruptcy and mortgage fraud. Law enforcement stepped in to shut the mill down and filed a complaint against Sandra with the State Bar.
Unfortunately, Sandra made a bad situation even worse. When the State Bar was investigating Sandra’s role in the loan mod mill, she claimed that she was a victim of identity theft, did not sign any of the paperwork and disavowed any relationship with the scammers. But once Sandra was presented with paychecks and other evidence, she admitted to knowing about the scam and allowing the scammers to use her name and law license. Sandra then went apeshit arguing that victims are also at fault, there was no attorney-client relationship and that she had no duty to be honest with investigators because she was not under oath. Finally, Sandra claimed that she had severe mental issues caused by excessive drinking, marijuana and heroin use as well as depression and anxiety.
The State Bar had little sympathy for Sandra’s newly licensed status or her personal issues. It determined that Sandra’s involvement in the loan mod mill and dishonesty with investigators would make her a future danger to the public. DISBARRED!
I hear about young lawyers getting involved in these non-lawyer owned mills. It is not limited to loan modifications. There are mills for bankruptcies, immigration, debt negotiation – anything that involves “vulnerable” people. The young lawyers who do not know any better take these jobs thinking that it is no different than being an in-house counsel for a large company. Even those who know better have no other choice due to the lack of jobs and large student loan debt.
Most resign after a few months – sometimes after a few days. In addition to the blatant ethical violations, most of these places have horrible working conditions. The attorneys have to deal with large case files because the owners are too cheap to hire additional staff. The high turnover likely leads to low morale. Also, the lawyers get yelled at or threatened by the owners or the sales staff if they tell the clients the truth or they demand a refund.
The frustrating irony is that the non-lawyer owners of these mills are outside the disciplinary jurisdiction of the State Bar. They will disappear for a few months and then set up a new outfit and hire a new mark to do their dirty work.
As for Sandra, she is fucked. This is a sad end to a young lawyer’s career. I have no sympathy for Sandra because of her actions during the investigation. Had she come clean and cooperated, she could have avoided disbarment. She cannot practice law, has a worthless law degree which she still has to pay for, and will be completely unemployable except for the most menial tasks. I’m sure her future husband will see the disbarment order and then run for the hills. Who knows how her parents will react. What will become of her? Who knows. Maybe she will disappear into obscurity. Maybe she will find some spiritual awakening and seek a new purpose in life. Or maybe she won’t give a fuck anymore and start a mill of her own.
Do the faculty and deans of low ranked law schools know that a number of their graduates have to suffer in places like this? If they do, do they care? My guess is no.